Are Better Deals Really to be had in August?

Fans in San Diego have been treated to a never-ending cycle of BS. In the winter, when free agency begins, the Padres often decline to make a big splash, instead arguing that they can better improve their team via trade. In the early spring, the Padres, who seemingly have always declined to make a huge trade in the winter, say that most trades occur once the season begins and teams have a better idea of what they need. Once the season begins, the Padres say to wait until the trade-deadline, at which point teams will know if they are “buyers” or “sellers.” Once the trading-deadline has passed, and the Padres have still not acquired a big-time bat, the front office says not to worry, that, in the words of Kevin Towers circa 2004: “There are better deals in August than July” (ESPN.com)

To be fair, as a smaller market team with limited financial resources, I am not sure that signing free agents to large multi-year deals is the team’s best strategy. I am also not convinced that the Padres have passed over any deals that would improve the team just because of the belief that “there are better deals in August.” In fact, my guess is that the Padres have, in past years, tried to acquire a bat earlier than August, but have not found a deal that helps the club in the short-term without compromising their long-term success. To keep fans excited about the club, and to appear non-complacent, Kevin Towers and other members of the front office feel it necessary to reassure the public, and in doing so, come up with ridiculous statements such as “There are better deals in August than in July.”

The rationale behind the Padres’ theory that August presents more trade opportunities than July is that teams have had an additional month to decide whether they are buyers or sellers. Because there is more certainty, teams are more willing to make trades. This actually makes some sense, and if all else was equal, would suggest that more deals could be made in August than July. The problem is that the structure of making deals changes after July 31. Prior to the trade-deadline, teams can swap nearly any player on their roster (excluding players with no-trade clauses). After the deadline, for a player to be traded to any team, he must first clear waivers. (Note: A player can also be traded to a team that claim him off waivers). In theory, any player can clear waivers. In reality, only players with contracts that exceed their actual value clear waivers. The result is that the only players available to include in trades are either guys with HUGE contracts and average (at best) production, and scrubs that can’t play at all. Think players like Tony Womack, Randall Simon, Armando Benitez, and Jeff Conine-all of whom were traded in August of 2004. The result of the trade deadline is not to stop all trades, but to limit trades to a select subset of the player pool. As a general rule, and one that is certainly applicable to trades in Major League Baseball, barriers to trade almost never create more “good deals” than would be possible if the barriers were removed.

It would not surprise me if the average Padres fan actually bought into the “there are better deals in August” dictum. These fans probably remember that Brian Giles was acquired in August of 2004; after the trade-deadline. At the time, Giles was one of the most consistent and most productive bats in the majors. Better yet, he was signed to a fairly affordable deal that would pay him $15 million over the next 2 season. What fans may forget is that the Padres were able to acquire Giles because they were in last place at the time and got first claim on any player put through waivers. Once the Padres claimed Giles, the Pirates could either trade Giles to the Padres, and only the Padres, or keep him. Giles could not be traded to any other team. Since the Padres were set to move into Petco Park the next year, they were looking to add a marquee bat (even if it meant taking on a bit more salary). Meanwhile, the Pirates were looking to shed salary and acquire some good, young talent. The unique circumstances of the trade led to a deal, but rarely do last place teams look to add salary. The Brian Giles trade was an exception to the rule.

The data backs up my assertion that there are not better deals in August than July. From 2005-2007, 76 trades have been made in July, while only 28 trades were made in August. In addition, there is no indication that more “high profile” or “impact” players traded hands in August than July. Please check out the list of traded players for yourself if you doubt this claim.

Neither theory, nor the historical data support the Padres’ claim that “there are better deals to be had in August than July.” Since the quote I have analyzed was spoken four years ago, I have faith that the words spoken are no longer held as gospel in the Padres front office. I care not to attack the Padres front office, I actually think it houses some of the smartest baseball minds in the game, and does a fantastic job. I merely hope I was able to debunk the myth that “there are better deals to be had in August than July.”